Key Highlights

  • Broadcom reported AI semiconductor Revenue of $10.8 billion in Q2 FY2026, a 143% increase year-over-year, above management's own internal forecast.
  • Q3 FY2026 AI semiconductor revenue guidance of $16.0 billion implies over 200% year-over-year growth — a sequential acceleration from Q2.
  • Total consolidated revenue of $22.187 billion in Q2 FY2026 grew 48% year-over-year, a company record.
  • Adjusted EBITDA of $15.244 billion in Q2 represented 69% of revenue, expanding from 67% in the prior year period.
  • Cash from operations reached $10.493 billion in Q2 FY2026, demonstrating that revenue growth is translating directly into cash generation.

In the history of the semiconductor industry, very few companies have grown a revenue line to $10.8 billion in a single quarter within three years. Broadcom Inc. (Nasdaq: AVGO) has done exactly that with its AI semiconductor Business, and the guidance for Q3 FY2026 suggests the trajectory is not flattening.

The results for Q2 FY2026 (quarter ended May 3, 2026) make for remarkable reading. AI semiconductor revenue of $10.8 billion grew 143% year-over-year and came in above management's forecast. Q3 guidance of $16.0 billion would represent a further 48% sequential increase from Q2 levels.

The Capex Supercycle Context

The hyperscaler Capital Expenditure cycle underpinning Broadcom's AI revenue is not speculative. The largest technology companies in the world are deploying hundreds of billions of dollars annually to build AI infrastructure, and a meaningful portion flows to custom silicon and AI networking — areas where Broadcom has established dominant positions.

To contextualise the scale: Broadcom's Q2 AI semiconductor revenue of $10.8 billion was generated in 13 weeks. At Q3 guided levels, the annualised AI semiconductor revenue run rate approaches $64 billion. One year ago, this number would have seemed implausible. It is now the guidance.

Is the Q3 Number a Peak?

The critical Investment question is whether $16.0 billion in Q3 represents the apex of the current cycle or the establishment of a new baseline. Several data points argue for the latter interpretation.

First, the revenue mix shift is structural. In Q2 FY2025, semiconductors represented 56% of Broadcom's total revenue. In Q2 FY2026, it represents 68%. This reflects a shift in the composition of the business toward AI-linked revenue underpinned by multi-year development commitments, not cyclical inventory restocking.

Second, the Margin profile is strengthening. Adjusted EBITDA for Q2 FY2026 was $15.244 billion (69% of revenue), compared with $10.001 billion (67% of revenue) in Q2 FY2025. When revenue grows 48% and margins expand simultaneously, the operating model is working with, rather than against, scale.

Cash Flow as the Ground Truth

The ground truth is cash generation. Broadcom generated $10.493 billion in cash from operations in Q2 FY2026, a 60% increase from $6.555 billion in Q2 FY2025. After capital expenditure of just $231 million, free cash flow was $10.262 billion — 46% of revenue. For the first half of FY2026, Broadcom generated $18.272 billion of free cash flow. The capex supercycle is flowing into Broadcom's bank account as hard cash.

Disclaimer: This article is for informational purposes only and does not constitute financial advice or investment recommendation. All data sourced from Broadcom Inc. Q2 FY2026 Earnings release dated June 3, 2026. Past performance is not indicative of future results. Investors should conduct their own Due Diligence.